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Bharti Airtel Limited
Business Description
Provides mobile, broadband & telephone (fixed line) and enterprise services (carriers & services to corporate)
Established July 07, 1995, as a Public Limited Company
Highlights for Second Quarter and Half Year Ended September 30, 2006
Market leader with a market share of all India mobile subscribers at 21.4%
Highest ever-net addition of 41.1 lakh customers in a single quarter.
Q2 Total Revenues of Rs.4,357 crore (up 61% Y-o-Y)
Q2 EBITDA of Rs. 1,702 crore (up 67% Y-o-Y)
Q2 Cash Profit of Rs. 1,644 crore (up 75% Y-o-Y)
Q2 Net Profit of Rs. 934 crore (up 79% Y-o-Y) and Net Profit crosses 1,600 crores
Market Capitalization
Customer Base 24,337,837 GSM mobile and 1,547,872 broadband & telephone (fixed line) customers (Status as at month ended July 31, 2006)
Operational Network
Provides GSM mobile services in all the 23-telecom circles in India, and was the first private operator to have an all India presence.
Provides broadband (DSL) and telephone services (fixed line) in 90 cities in India.
OrganisationStructure
As an outcome of a restructuring exercise conducted within the company; a new integrated organizational structure has emerged; with realigned roles, responsibilities and reporting relationships of Bharti’s key team players.
With effect from March 01, 2006, this unified management structure of 'One Airtel' will enable continued improvement in the delivery of the Group’s strategic vision.
Buying behavior
IT research firm In-Stat predicts that the global market for wireless handsets will grow 23 percent to USD 136 billion in 2006, and may exceed USD 250 billion in 2011. In Stat said the wireless market has reached USD 110 billion in 2005.
The firms pointed out that after 2006 the growth rate would be slower. So depending upon the Market behavior for Handsets the buying behavior for Service Provider will also be bit slow in the year 2007.
3G is the latest innovation India is goin’ through. Airtel is goin’ to start its operation soon on 3-G network system where the user will have the facility of online TV shows etc. on the mobile Phone itself.
In Stat said that the prediction is not preordained. According to the study it depends upon phone manufacturers continuing to add features that consumers’ value and the rest of the industry can support.
The greatest challenge is to just add the features different customers want without adding unneeded cost or complexity from unneeded or unwanted features from the service provider.
The report includes end-user survey results that explore current customer attitudes as well as how it corresponds to there past buying behavior.
In Stat said the goal for wireless phone manufacturers and service provider is to make customers forget they ever tolerated a phone or service without the new innovations. This has happened as the mobile phone has advanced dramatically in the past several years.
According to the survey, very few U.S. users, less than 5 percent, do not use at least one of the technological innovations introduced over this period. Consumers seem ready to embrace other new features, including location-based services and Bluetooth connectivity, but only a narrow segment have interest in multimedia features and camera phones use will see a decline, predicts In-Stat.
"Big trends over the next five years include adoption of wireless phones as a mobile wallet that and more users will carry multiple devices," says Bill Hughes, In-Stat analyst.
"The primary changes in phones over the next five years are that they will become more capable, incorporate beefier security, and be more targeted as organizations have greater involvement in the wireless service decisions of their employees. Perhaps more importantly, they will help us be safer."
The key findings of the research, "The Big Trends for Cell Phones, 2006-2011” are:
• Worldwide sales of mobile phones will rise from 935 million units in 2006 to more than double that 2011 and with this service providers will also have a rise.
• Smart Phone sales will surpass 480 million units by 2011and to cash it on all the service Providers are launching different useful facilities to cash it on the rising trend of Smart Phone Usage.
• Nokia is by far the most popular phone brand among survey respondents who obtained their phone through work or for private uses and Airtel is the most trusted network in which companies like to operate.
The research covers the worldwide mobile phone market and their service provider and predicts future developments for wireless phones over the next five years.
The research takes into consideration the entire wireless phone value chain, which consists of phone manufacturers, supplier ecosystem, distributors, carriers, and in many cases, the organization to which many customers belong.
Product promotion strategy and Ad campaign
To understand the product promotion strategy and Ad campaign we have to look into the vision statement of Airtel
AIRTEL VISION STATEMENT & BRAND POSITIONING
By 2010 Airtel will be the most admired brand in India:
• Loved by more customers
• Targeted by top talent
• Benchmarked by more business
"In a service industry like telecom, people live a brand 24X7. It's all about experience; and for Airtel 'brand=customer experience," says Rajan Mittal, joint managing director, Bharti Tele-Ventures Ltd.
That's now, but when mobile telephony began in India a decade ago, the brand was all about aspiration. That's understandable: a handset cost about Rs 45,000 - the price of a second-hand Fiat - and call charges hovered around Rs 16 a minute.
Naturally, the target customer was clearly defined: elite, upmarket professionals and entrepreneurs. "We positioned Airtel as an aspirational and lifestyle brand, in a way that trivialised the price in the mind of the consumer.
It was pitched not merely as a mobile service, but as something that gave him a badge value," recalls Hemant Sachdev, chief marketing officer (mobility) and director, Bharti Tele-Ventures.
Airtel was on a power trip: the logo was black, uppercase bold lettering; and the baseline was "the power to keep in touch". "
From day one, it was decided that the brand should always connote leadership - be it in network, innovations, offerings or services," says Diwan Arun Nanda, CMD, Rediffusion-DY&R, the agency that has created all Airtel ads over the past decade. The taglines emphasised that stance: "Airtel celebrates the spirit of leadership" and "The first choice of the corporate leaders".
This was also a time when customers needed to be educated; interest levels were high, but customers' exposure to the cellular world was limited. Airtel took out full and half-page ads in newspapers, answering queries like "what is roaming?", "what is coverage area?" and "how to make international calls".
In 1999, the rules of the game changed. The New Telecom Policy came into effect, replacing license fees with a revenue-sharing scheme and extending the license period from 10 to 20 years.
Now, cellular service operators could drop their prices and target new customer segments. As SEC B became part of the catchment area, Airtel's communication changed from "power" to "touch tomorrow".
The focus now was on the endless possibilities of technology to make life good and advertising became two-pronged: a product-driven communication that showcased new offerings like the Magic prepaid card, and an emotional communication that showed younger people.
In 2002, Airtel signed on music composer A R Rahman and changed its tune to "Live every moment": Rahman's signature tune for Airtel is, perhaps, the most downloaded ringtone in India. But that was just part of the ongoing communication.
The following year Airtel adopted the "Express yourself" positioning, which is also its current tagline. Now, the emotional angle was predominant - and stark, black and white imagery to stand out in what was becoming a highly commoditised, crowded market.
The latest campaign continues that thought. Only, mobile telephony is now extending to even low-income mass categories. So the first TVCs in Hindi and regional languages are now on air, as are low-priced products, like the Rs 200-recharge coupon.
Communication was just part of the battle: customer service would prove more critical. "We were very clear that Airtel will be a service-led brand," says Mittal.
RELATIONSHIP MANAGEMENT
Accordingly, Airtel was the first cellular service provider to start customer centres (called Airtel connects), where customers could pay their bills, apply for new connections and touch and feel new handset models.
The way to the future, though, seems to be through product innovations such as easy charge (recharging prepaid connection through SMS), hello tunes, the Blackberry option, stock tickers and M-cheques (mobile credit cards).
The customer care centres, too, are metamorphosing into "relationship centres", one-stop shops where subscribers can not only pay their bills and have their queries answered, they can shop for new phones, surf the net and enjoy a cup of coffee. "What matters is what the customers want," points out Mittal.
Based on there vision statement their product Promotion strategy and Ad Campaign is based. Airtel is an amazingly successful brand. It has very visible advertising, with a fairly high share of voice.
As mobile services are an extremely competitive (cutthroat?) category, there are a number of advertising renditions that happen. One of the most interesting ones for me as a consumer was the one with A. R. Rahman in Hyde Park, was it, playing with an assortment of musicians even as an adoring recording artist listens to the music that is carried through Airtel mobile's service.
it was a brilliant track. Airtel had integrated this piece of communication, making it a fairly popular ring tone. Every second Airtel user had this ring tone and enthusiastic guys even used it in their cars as they reversed.
Brands often lose their way when their communication deviates from a tried and tested property just to be different. This is not a situation that cannot be salvaged, though. Brands stray when they try to be different for the sake of being different.
The desire to be different is pretty common in advertising. And this desire to be different usually means a break from the past.
AIRTEL’s Ads are a trend setting Ads and considered a landmark Product promotion, which they are doing for their Broad Band and telephone services are also a land mark promotion campaign.
Promotions, whose need is increasingly being felt by the surging services sector, will click if they realize marketing objectives and reinforce brand values.
Other precautions too need to be taken in the case of promotions. For instance, too many promotions can be detrimental to the health of a brand.
A brand, which is perpetually on price-off, would not only lose key brand attributes but also consumer interest. The consumer's reasoning being `if a product is cheaper now, does it mean I was being overcharged earlier'?
Similarly, if a brand is always doling out freebies, sales would be affected when there are no freebies on offer.
Marketers agree that no matter the market segment, for any promotion to be successful it has to be a part of an overall marketing strategy and not a one-off sales-driving initiative.
COMPERATIVE PRICING OF DIFFERENT MOBILE SERVICE PROVIDERS
THOUGH THE rollout of mobile cellular networks (GSM) in India began only seven years ago, the industry has already passed through three growth phases. The initial phase (1995-98), period with the bare minimum network coverage, catered only to the high-end segment with call charges around Rs.14 a minute.
With the explosion in subscriber volume during 1998-2000 (Phase 2), the rollout spread to metropolitan cities, major highways and relatively dynamic small cities bringing down call charges to Rs. 9 a minute.
The third phase (2001 and 2005) was a watershed for the Indian mobile industry; the growth in these two years exceeded all the achievement of the earlier five years.
This pushed the operators to add capacity to their networks furiously The low call charges or upfront costs of mobile are only bait to lure customers and only the QoS can ensure retention capability for a service provider.
An attempt is made here to highlight the current QoS lag of Indian networks vis-a-vis the international mobile market and the minimum that companies should do to sustain their subscriber base. There is also a peep into the billing aspect, which indicates that Indian subscribers are paying much more than they need to.
The mobile operators have put up the required infrastructure to carry calls on their networks with capacities determined by the demographic profile of their respective areas buttressed by market research. However, no guidelines exist from the regulatory authority (TRAI) for QoS of the networks.
Traditionally, wireless operators have used a number of metrics that collectively provide a measurement of `network service quality' from the users' perspective. A combination of the following 4-key performance indicators (KPIs) largely determines the overall service quality: system coverage; call blockage; voice quality; and dropped call rate.
Following four is the main area of attention kept in mind by the companies while providing and deciding pricing
• System coverage
• Call blockage
• Voice quality
• Dropped call rate
Comparison chart between Current Pricing for different cellular service provider in all the four zones are provided in the link www.india-cellular.com.
Business Description
Provides mobile, broadband & telephone (fixed line) and enterprise services (carriers & services to corporate)
Established July 07, 1995, as a Public Limited Company
Highlights for Second Quarter and Half Year Ended September 30, 2006
Market leader with a market share of all India mobile subscribers at 21.4%
Highest ever-net addition of 41.1 lakh customers in a single quarter.
Q2 Total Revenues of Rs.4,357 crore (up 61% Y-o-Y)
Q2 EBITDA of Rs. 1,702 crore (up 67% Y-o-Y)
Q2 Cash Profit of Rs. 1,644 crore (up 75% Y-o-Y)
Q2 Net Profit of Rs. 934 crore (up 79% Y-o-Y) and Net Profit crosses 1,600 crores
Market Capitalization
Customer Base 24,337,837 GSM mobile and 1,547,872 broadband & telephone (fixed line) customers (Status as at month ended July 31, 2006)
Operational Network
Provides GSM mobile services in all the 23-telecom circles in India, and was the first private operator to have an all India presence.
Provides broadband (DSL) and telephone services (fixed line) in 90 cities in India.
OrganisationStructure
As an outcome of a restructuring exercise conducted within the company; a new integrated organizational structure has emerged; with realigned roles, responsibilities and reporting relationships of Bharti’s key team players.
With effect from March 01, 2006, this unified management structure of 'One Airtel' will enable continued improvement in the delivery of the Group’s strategic vision.
Buying behavior
IT research firm In-Stat predicts that the global market for wireless handsets will grow 23 percent to USD 136 billion in 2006, and may exceed USD 250 billion in 2011. In Stat said the wireless market has reached USD 110 billion in 2005.
The firms pointed out that after 2006 the growth rate would be slower. So depending upon the Market behavior for Handsets the buying behavior for Service Provider will also be bit slow in the year 2007.
3G is the latest innovation India is goin’ through. Airtel is goin’ to start its operation soon on 3-G network system where the user will have the facility of online TV shows etc. on the mobile Phone itself.
In Stat said that the prediction is not preordained. According to the study it depends upon phone manufacturers continuing to add features that consumers’ value and the rest of the industry can support.
The greatest challenge is to just add the features different customers want without adding unneeded cost or complexity from unneeded or unwanted features from the service provider.
The report includes end-user survey results that explore current customer attitudes as well as how it corresponds to there past buying behavior.
In Stat said the goal for wireless phone manufacturers and service provider is to make customers forget they ever tolerated a phone or service without the new innovations. This has happened as the mobile phone has advanced dramatically in the past several years.
According to the survey, very few U.S. users, less than 5 percent, do not use at least one of the technological innovations introduced over this period. Consumers seem ready to embrace other new features, including location-based services and Bluetooth connectivity, but only a narrow segment have interest in multimedia features and camera phones use will see a decline, predicts In-Stat.
"Big trends over the next five years include adoption of wireless phones as a mobile wallet that and more users will carry multiple devices," says Bill Hughes, In-Stat analyst.
"The primary changes in phones over the next five years are that they will become more capable, incorporate beefier security, and be more targeted as organizations have greater involvement in the wireless service decisions of their employees. Perhaps more importantly, they will help us be safer."
The key findings of the research, "The Big Trends for Cell Phones, 2006-2011” are:
• Worldwide sales of mobile phones will rise from 935 million units in 2006 to more than double that 2011 and with this service providers will also have a rise.
• Smart Phone sales will surpass 480 million units by 2011and to cash it on all the service Providers are launching different useful facilities to cash it on the rising trend of Smart Phone Usage.
• Nokia is by far the most popular phone brand among survey respondents who obtained their phone through work or for private uses and Airtel is the most trusted network in which companies like to operate.
The research covers the worldwide mobile phone market and their service provider and predicts future developments for wireless phones over the next five years.
The research takes into consideration the entire wireless phone value chain, which consists of phone manufacturers, supplier ecosystem, distributors, carriers, and in many cases, the organization to which many customers belong.
Product promotion strategy and Ad campaign
To understand the product promotion strategy and Ad campaign we have to look into the vision statement of Airtel
AIRTEL VISION STATEMENT & BRAND POSITIONING
By 2010 Airtel will be the most admired brand in India:
• Loved by more customers
• Targeted by top talent
• Benchmarked by more business
"In a service industry like telecom, people live a brand 24X7. It's all about experience; and for Airtel 'brand=customer experience," says Rajan Mittal, joint managing director, Bharti Tele-Ventures Ltd.
That's now, but when mobile telephony began in India a decade ago, the brand was all about aspiration. That's understandable: a handset cost about Rs 45,000 - the price of a second-hand Fiat - and call charges hovered around Rs 16 a minute.
Naturally, the target customer was clearly defined: elite, upmarket professionals and entrepreneurs. "We positioned Airtel as an aspirational and lifestyle brand, in a way that trivialised the price in the mind of the consumer.
It was pitched not merely as a mobile service, but as something that gave him a badge value," recalls Hemant Sachdev, chief marketing officer (mobility) and director, Bharti Tele-Ventures.
Airtel was on a power trip: the logo was black, uppercase bold lettering; and the baseline was "the power to keep in touch". "
From day one, it was decided that the brand should always connote leadership - be it in network, innovations, offerings or services," says Diwan Arun Nanda, CMD, Rediffusion-DY&R, the agency that has created all Airtel ads over the past decade. The taglines emphasised that stance: "Airtel celebrates the spirit of leadership" and "The first choice of the corporate leaders".
This was also a time when customers needed to be educated; interest levels were high, but customers' exposure to the cellular world was limited. Airtel took out full and half-page ads in newspapers, answering queries like "what is roaming?", "what is coverage area?" and "how to make international calls".
In 1999, the rules of the game changed. The New Telecom Policy came into effect, replacing license fees with a revenue-sharing scheme and extending the license period from 10 to 20 years.
Now, cellular service operators could drop their prices and target new customer segments. As SEC B became part of the catchment area, Airtel's communication changed from "power" to "touch tomorrow".
The focus now was on the endless possibilities of technology to make life good and advertising became two-pronged: a product-driven communication that showcased new offerings like the Magic prepaid card, and an emotional communication that showed younger people.
In 2002, Airtel signed on music composer A R Rahman and changed its tune to "Live every moment": Rahman's signature tune for Airtel is, perhaps, the most downloaded ringtone in India. But that was just part of the ongoing communication.
The following year Airtel adopted the "Express yourself" positioning, which is also its current tagline. Now, the emotional angle was predominant - and stark, black and white imagery to stand out in what was becoming a highly commoditised, crowded market.
The latest campaign continues that thought. Only, mobile telephony is now extending to even low-income mass categories. So the first TVCs in Hindi and regional languages are now on air, as are low-priced products, like the Rs 200-recharge coupon.
Communication was just part of the battle: customer service would prove more critical. "We were very clear that Airtel will be a service-led brand," says Mittal.
RELATIONSHIP MANAGEMENT
Accordingly, Airtel was the first cellular service provider to start customer centres (called Airtel connects), where customers could pay their bills, apply for new connections and touch and feel new handset models.
The way to the future, though, seems to be through product innovations such as easy charge (recharging prepaid connection through SMS), hello tunes, the Blackberry option, stock tickers and M-cheques (mobile credit cards).
The customer care centres, too, are metamorphosing into "relationship centres", one-stop shops where subscribers can not only pay their bills and have their queries answered, they can shop for new phones, surf the net and enjoy a cup of coffee. "What matters is what the customers want," points out Mittal.
Based on there vision statement their product Promotion strategy and Ad Campaign is based. Airtel is an amazingly successful brand. It has very visible advertising, with a fairly high share of voice.
As mobile services are an extremely competitive (cutthroat?) category, there are a number of advertising renditions that happen. One of the most interesting ones for me as a consumer was the one with A. R. Rahman in Hyde Park, was it, playing with an assortment of musicians even as an adoring recording artist listens to the music that is carried through Airtel mobile's service.
it was a brilliant track. Airtel had integrated this piece of communication, making it a fairly popular ring tone. Every second Airtel user had this ring tone and enthusiastic guys even used it in their cars as they reversed.
Brands often lose their way when their communication deviates from a tried and tested property just to be different. This is not a situation that cannot be salvaged, though. Brands stray when they try to be different for the sake of being different.
The desire to be different is pretty common in advertising. And this desire to be different usually means a break from the past.
AIRTEL’s Ads are a trend setting Ads and considered a landmark Product promotion, which they are doing for their Broad Band and telephone services are also a land mark promotion campaign.
Promotions, whose need is increasingly being felt by the surging services sector, will click if they realize marketing objectives and reinforce brand values.
Other precautions too need to be taken in the case of promotions. For instance, too many promotions can be detrimental to the health of a brand.
A brand, which is perpetually on price-off, would not only lose key brand attributes but also consumer interest. The consumer's reasoning being `if a product is cheaper now, does it mean I was being overcharged earlier'?
Similarly, if a brand is always doling out freebies, sales would be affected when there are no freebies on offer.
Marketers agree that no matter the market segment, for any promotion to be successful it has to be a part of an overall marketing strategy and not a one-off sales-driving initiative.
COMPERATIVE PRICING OF DIFFERENT MOBILE SERVICE PROVIDERS
THOUGH THE rollout of mobile cellular networks (GSM) in India began only seven years ago, the industry has already passed through three growth phases. The initial phase (1995-98), period with the bare minimum network coverage, catered only to the high-end segment with call charges around Rs.14 a minute.
With the explosion in subscriber volume during 1998-2000 (Phase 2), the rollout spread to metropolitan cities, major highways and relatively dynamic small cities bringing down call charges to Rs. 9 a minute.
The third phase (2001 and 2005) was a watershed for the Indian mobile industry; the growth in these two years exceeded all the achievement of the earlier five years.
This pushed the operators to add capacity to their networks furiously The low call charges or upfront costs of mobile are only bait to lure customers and only the QoS can ensure retention capability for a service provider.
An attempt is made here to highlight the current QoS lag of Indian networks vis-a-vis the international mobile market and the minimum that companies should do to sustain their subscriber base. There is also a peep into the billing aspect, which indicates that Indian subscribers are paying much more than they need to.
The mobile operators have put up the required infrastructure to carry calls on their networks with capacities determined by the demographic profile of their respective areas buttressed by market research. However, no guidelines exist from the regulatory authority (TRAI) for QoS of the networks.
Traditionally, wireless operators have used a number of metrics that collectively provide a measurement of `network service quality' from the users' perspective. A combination of the following 4-key performance indicators (KPIs) largely determines the overall service quality: system coverage; call blockage; voice quality; and dropped call rate.
Following four is the main area of attention kept in mind by the companies while providing and deciding pricing
• System coverage
• Call blockage
• Voice quality
• Dropped call rate
Comparison chart between Current Pricing for different cellular service provider in all the four zones are provided in the link www.india-cellular.com.